Honest Capitalist Inadvertently Wrecks Capitalism



hello welcome back to non-compete I'm American Johnson and today I'm a little gussied up I got my hair gelled back I got my Swiss watch on instead of the ten dollar proletarian Casio I usually wear reason being I am attempting to channel my inner capitalist I'm trying to reach deep within into those cryptic locked away segments of my brain that I used to access on a daily basis when I myself was a capitalist I've run many businesses in my life some of them were very successful others less so and I've had a lot of employees reason I'm bringing this all up is because today we are engaging with the words and ideas of a current capitalist who goes by the name of Rudy with alpha investments now Rudy has sort of a YouTube channel but also a business empire mostly pertaining to the game of Magic the Gathering now don't click away just yet you don't actually have to know anything about magic the other day at all to watch this video it really what we're talking about are much more abstract ideas related to capitalism but the reason that that Rudy drew my attention and the reason that I'm presenting his words and actions and ideas to you today is because Rudy is a special sort of capitalist Rudy really stands out from the crowd in my mind I've watched a lot of his videos he is incredibly honest he's an honest capitalist he tells you exactly how it is in his mind he doesn't pull any punches he doesn't try to gloss over or sugarcoat anything he tells you exactly how he feels about capitalism about investing in a way that I find somewhat refreshing in this really kind of twisted disturbing way and a lot of ways Rudy reminds me a lot of myself back when I was a capitalist I considered well in in some ways Rudy's more honest than I was at least with himself because I considered myself to be sort of an enlightened capitalist and I believed that you know what I was doing was creating jobs and and and creating opportunities for my employees whereas Rudy Rudy really seems to see the dark side of capitalism and he embraces it so just to let you know want to make this clear this isn't really a takedown of Rudy or Rudy's Channel it's also not a defense it's what I what I hope to do here is just present these ideas and show them to you kind of in their naked form and supplement them a little bit with my own experiences because Rudy's mostly talking about like retail business and online business and investment kind of stuff I have some experience with some of those aspects of those businesses but I also have some experience that doesn't overlap with Rudy's so I've also got Iran's service based industries in that and that sort of thing so we will just go through listen to what Rudy has to say unpack it and maybe learn a thing or two along the way so first let's just get an idea of Rudy's political perspective and Rudy is you know considers himself a political I don't give a shit about politics I don't like it I think they generalize people into certain categories the left versus the right thing is really stupid because the things on the left I agree with those things on the right I agree with the things in the middle I agree with there's things on all three sides I think everyone's stupid I so I don't agree labeling everybody to a certain category is very beneficial therefore I've never liked politics I still don't I probably never will even in the future and we have whole different people involved there's no Hillary Trump stuff I still don't like politics not gonna make any difference to me I think it's all stupid I think it's all corrupt there's a lot of underlying hidden things same thing Wizards of the coast same thing in corporate America it's about who you know it's about nepotism there's a lot of people like that what you're born into if are you a trust fund baby it comes with that kind of stuff unfortunately I don't send me that stuff I never really gave a shit about any of that I don't fit into the molds of all that stuff and quite frankly don't give it I just don't care so yeah Rudy is right where I was about five years ago when I was deep in the throes of my privileged a political centrist everyone on all sides are idiots mindset I would do that face for a few years but so this isn't really so much about Rudy's politics as much as it's about Rudy's perspective on capitalism so let's get a taste for that perspective let's see what Rudy has to say about capitalist industries specifically Wizards of the coast which is the corporation that manufactures this game Magic the Gathering which Rudy invests in and just to set this up Wizards of the code has for a long time been engaging in shady anti-consumer practices you know as corporations are wont to do and rudi explains how and why corporations engage and the employees of corporations engage in these kinds of nefarious practices hasbro is saying you need to make us damn money and that's what they're gonna do they're gonna keep making damn money and why do people have a hard time accepting its business it's not wizards versus the players it's the business world their shareholders it's publicly traded there's equity in debt markets they have Board of Directors if they don't produce they get fired it's not their fault it's like when these banks and Wall Street you shady shit and then they get fired or they're in the news for doing something these people aren't bad people these people are getting pressure from higher up or from Wall Street or shareholders to perform or do certain things and if they don't they get fired anyways they lose their job anyways so they sit down and they go like this okay we don't want to go back to doing you ones and you choose and see twos and all that crap because it's too confusing for the playerbase we don't want to do it okay so the problem is Bob over there you've been coming in on Sundays and if you hit your goal we're gonna fire you but you can't do anything shady you can get fired too so let me get this straight if I don't hit the numbers because I do everything with jitan by the book you're gonna fire me so if I do something shady and try to hit my goal I run the risk of getting caught and breaking the rule of the company or the law and I get fired so either way the outcome and the Venn diagram and the decision tree if you guys wanna be all corporate bullshit in your face you know either way the outcome is you have a probability of getting fired on any given month when you're in that culture so at the end of the day you might as well throw the damn dice and if you get lucky and you don't get tagged guess what you're gonna hit your goal you're gonna get a bonus you're gonna keep your job okay if you didn't take the risk guess what you didn't hit your goal they're gonna fire you anyways if you did if you do take wrists and it goes wrong you still get fired so you have three possible outcomes two of which are bad so you might as well go for the one good outcome so now hopefully you see what I mean when I say that Rudy is a very honest capitalist he very eloquently I believe explained and outlined exactly how corporations and capitalists put pressure on employees to do bad stuff to do harm for that profit motive and in addition as we will see in just a second Rudy also deeply understands how capitalist employers just grind us down and and inflict alienation upon us and let's just hear what Rudy has to say about what it's like to work in the capitalist system it's not when you work for companies and work for corporations that yes they steal your soul and just destroy you from the inside out but the problem is when you work full-time for these big companies what happens is by the time you get off work at the end of the day and you watch my videos at night you are so effing tired and psychologically drained of creativity you don't have the ability to go home at night in focus and just draw up ideas and try to be creative think outside the box in these companies I don't know what it is but when I worked for these firms in different corporations for some reason by the time you get off work you're done that's why everybody goes out and drinks after they work these companies and they have team meetings and team outings to help build the culture everybody be friendly it helped keep morale up because you know Morales the number one destroyer of corporations it's spreads like a flippin virus so you know that's but it's really weird that's why a lot of people when they get in these little hamster wheels of these companies they don't have the ability to jump off the wheel and do their own thing because the wheels spinning they're used to that rhythm and if they jump off they trip and fall and it's like they absorb your creativity even if you're making 50 60 even a hundred thousand a year you're cracking six figures even if you make that note before taxes you know for some reason by time you get off work there's nothing left of you you're driving a home you're like this I mean you're just dead on the inside so obviously Rudy is not a proponent of working for capitalists within this exploitative system he probably wouldn't call it alienation but I think he described very well a lot of the processes and and side-effects of worker alienation and the way that capitalist employers are just these meat grinders that just wear us down so Rudy's advice as a capitalist would be for you to go out and start your own business if you don't like being an employee if you don't like your boss taking money out of your paycheck every week go out and hang up your shingle and start your own business but as you can see it's not really that easy and as a former capitalist this is something that I like to stress as often as I can it's just not the case that under capitalism anyone can go out and start a business it takes capital to become a capitalist so first Rudy's gonna talk about starting a brick-and-mortar retail store and that's just the beginning okay because we're gonna talk about all kinds of different forms of entrepreneurship but let's just see what it takes to start a bare-bones minimal basic retail store under capitalism I want to talk about opening the game store opening a good local card store and opening a videogame store vintage books strategy guides whatever whatever you want to open for the most part most people do to the cost of building inventory and getting the ground floor and deposits and fees and hookups and different things it's extremely difficult and the odds are really stacked against you to really turn a profit within 12 to 18 months I'm just being honest I've seen people do it majority of people they don't and as we all know in my personal opinion as a distributor has informed me 70% of people period don't make it past a year probably gonna get the rent on the place for at least if you're in Florida depending on what party you are it could be as low as a thousand bucks a month or maybe the 2,000 a month any more cheaper realistic cost so if your utility bill let's say is averaging let's say three or four hundred a month I'd say you're probably looking at let's say two or three or in a month between you know just phone a cell phone if you want for the business you know high-speed internet remember high-speed you know all these items are more expensive because in a commercial business area they said oh okay so you want Internet oh wait that building oh that's for making money building therefore we're gonna charge it double so if you're gonna work by yourself with no pimp LOI EES no labor no payroll you know that shit you're gonna do it all by yourself we're at $2,600 a month for the basic principle now let's say of course you want to throw in you know you want to be legit business license tax exempt certificate so you need a resale certificate and then let's say you want to actually have business insurance crap like that so let's add just 100 bucks a month or 200 months anywhere in the country you're located but this twenty seven hundred a month total so we have a basic basic bare-bones overhead of you're gonna work by yourself and maybe your significant other your family you're at twenty seven hundred dollars a month and that's what you starving to death and your family falling over because you're not paying anybody anything twenty seven hundred dollars a month rent okay which means that you're also gonna have two thousand dollar deposit right up front which means right on the gate to open the very first day just to have an empty room you're looking almost five grand now two thousand plus twenty seven hundred you got forty seven hundred dollars already and you're having a body inventory you can open up the sign and unlock the door someone could come in you don't even have anything to sell the hell are you gonna do in someone hopes and dreams shit so exactly so five grand right there five grand in the bank you got an empty room no build-out no counters no fixtures no chairs no tables help probably we have working light bulbs bathroom facilities actual a point-of-sale terminal either uh some sort of credit card anything you gotta have everything set up this is a basic empty room your now owner or temporary owner I leave $5,000 right of the gate and you got an empty room that's where we stand so far in this video so at this point you've committed yourself that you can't do any other job to make some additional side income or anything else because you're gonna have to work substantial hours to get this off the ground okay so if you're that means you can't work part time at Taco Bell making an extra couple of week to help pay for your car Timmy's game store you can't do it because you're gonna have to devote all your time all your focus and everything into getting this thing off the ground now before we cut this video off here you're gonna probably want another probably a couple thousand dollars in counters fixtures tables chairs you're probably gonna be looking at to do it nicely another couple grand easy I'd be surprised if you can buy nice glass counters for a big unit and the shelves and the tables and the chairs for under a thousand two or three personally I think it's probably gonna be like five grand just in all the fixtures for a whole store so now we're gonna fast forward five plus five we're at ten thousand dollars in capital to get to find a unit open the first day and put fixtures in it congratulations you now have a working shell with nothing for sale and we're out ten grand already so we're at ten gram probably fifteen grand if you want to count the sign that has to be up in the first few months and that's all we are that would be the basic entry steps to get off the ground and we haven't sold anything we haven't bought anything you haven't done with a shitty customer you haven't dealt with anything man again all these little things are cost that people don't quite fully think about all everybody thinks about is no no Rudy I just want to do this it's my dream and that's fine but you don't realize the capital how strenuous it is so we got everything set up except inventory we need shit to sell I think I've been in probably ten game stores in my entire life out of the ten stores I've been it only three of the ten stores in my opinion were legitimate and I knew would stand the test of time most of them I knew then we're gonna make it the stores were terrible run you walk in there half the rooms empty it was a poster on the wall there's one little case with like one booster box of oath of the gatewatch or something and I'm like and there's two people in the corner playing magic I'm like dude this place ain't gonna make it there is no way they're gonna flip that overhead remember two thousand a month plus miscellaneous twenty seven hundred a month and overheads there's no way they're gonna put twenty seven hundred a month overhead that's with no payroll that's with them working by themselves the owner and his significant other and maybe you have your family being slave labor for free they're not gonna make it you can't flip the bill for that you gotta have inventory you've got to be diversified you've got to be able to have capital available whether you're gonna leverage yourself and borrow dangerous stuff or you're gonna have a bunch of money in the bank and you're ready to tackle this shit Rudy how much money should I have in the bank how much should I put for inventory for the first day what should i buy it well you're not gonna like my answer and a lot of people aren't gonna agree with me if I had to open up a card Hobby video game book vintage wreath any form a retail store today that was brand new I don't think I would personally open the store with less than $50,000 in the bank and when I say $50,000 in the bank I mean 50,000 not my personal checking account I mean in a separate Timmy's game store checking account then I'm gonna snow I'm gonna spend all that money cannot be used for my personal use my family my house my mortgage my rent my utilities if I have a car payment or insurance or home phone cable bill whatever I'm talking a separate account with 50,000 you know I know a lot of people won't agree with me but I'm gonna tell you how I feel because I will not engage in a certain business transaction or a certain amount of risk unless I'm comfortable with it and I have a buffer you need a lot of cash flow to make it work so you can take the hits when there's problems theft from an employee or a theft from a customer or people hosing you online so what happens is even when an opportunity comes up you can't seize the moment I mean what if somebody comes in your store and they drop a big pile of old stuff on your desk and you look at it there's all these random factory-sealed dual decks from years all of them all these old ones everything there's piles on and you go wow this is really great I love to buy these I'll give you like 10 or 12 bucks a duel deck and or 15 store credit whatever and then below that you see a pile of old vintage you know Super Nintendo games factory sealed with the wyfold of the h-scene and you know you go oh my god and he wants like two or three thousand for it and you know you can probably sell them for ten thousand well guess what if you don't have the money you just missed out on probably one of the best opportunities for your business in a long time so back to reality fifty thousand is what I personally would do for a game store if I'm gonna open up a card a video game a vintage anything I want 50 G's and cash available liquidity so if I get a conspiracy set and I'm down ten grand after a month you know I gotta flip the other ten grand till the money comes back you need to be prepared for it fifty K to me it's my minimum number I wouldn't open a store with less than fifty available extra remember inventory cash management don't run out of liquidity you ran out of liquidity Timmy's game store will be no more so there you go tens of thousands of dollars and the average worker in America works paycheck to paycheck has a thousand dollars or less in the bank six thousand dollars in credit card debt and makes about thirty thousand dollars per year so you know yeah and if you look at the statistics the average startup business in America costs about thirty thousand dollars to start so which is even less than Rudy's minimum and Rudy's saying that if you're undercapitalized you're probably going to fail which is true because the most common reason businesses fail is under capitalization that means not having enough money to make cash flow not having enough money to capitalize on opportunities so if you don't have tens of thousands of dollars you're never gonna make it in a brick-and-mortar retail business I used to run a brick-and-mortar retail business we probably invested about thirty or forty thousand dollars in our business and making that cash flow is just as difficult as Rudy said it would be and we were just I mean we were saving money every way we possibly could you know retail is obviously a very expensive endeavor to undertake you're gonna have to have a huge bankroll to do it and have any chance of being successful so I know what you're saying you're saying brick-and-mortar is you know of course it's out of the reach of most people of course most people are gonna be able to go out and get a $2,000 a month lease or whatever that's why nowadays we have all these new opportunities these ways of bootstrapping our businesses like you could start an online business and you could you know overnight you can set up a shop on Amazon or Ebay or something like that and and get into business for yourself so let's see what Rudy who is an experienced online retailer has to say about selling things online no matter what you do there are literally people again I've said it five times right they just want to hose you whether it's because they they just need the money they don't believe in capitalism there is no way I'm gonna be very blunt with everyone upfront there is no way to actually remove these risks you cannot get around it you're going to get burned people are gonna hose you you're gonna get screwed over you need to accept that going into it which brings us number one you must budget for fraud you must figure out whatever items you're selling you personally I use a 1 and 100 transaction defect fraud rate therefore if you're only making $1 a box you sell 100 boxes and 1 100 box of screws you over you're not you're not gonna do well you must make sure you are budgeting for the losses and for the people are going to hose you it's not if but it's how many people and when it happens you have to be ready for it and you must leave emotion out of this whole thing if you just get too emotional you're too wound up you're gonna get your idiot slaughter then you go online you start realizing that everyone's already doing it and everything is only selling for pennies on the dollar literally the price you get from a distributor for sealed box of eldritch moon because you've been in business two years now you're getting the Box 478 dollars ships here from the distributor you go online they're self on eBay for ninety dollars after shipping and fees you're gonna lose a dollar 50 or you're gonna make a dollar 50 depending on where it ships to and you go what the hell am I supposed to do with that what am I gonna do hire someone to do one online pay him 10 dollars an hour to make a dollar a box and then pray and a hope they don't hose you on eBay it's not a scam it's not gonna work very well and you get burned a lot you know if you don't have tracking for small orders even if you have tracking people will say oh we got damaged and they ship it back and it's not even the same thing you mailed there's nothing you can do it's no different when then when customers come in your store or if you have a bunch of people in here people are gonna steal from you period you're gonna have loss so yeah just like you said it's a very risky endeavor to start an online business just as it is to start a brick-and-mortar business just because you don't have these expenses of like having a lease or you know having to pay for your electrical bill and all that stuff every month doesn't mean you're not going to have tremendous expenses tremendous exposure and risk you know you're risking a lot of money and there are a lot of ways to lose it very very fast in the online business world I have done online business myself and in addition I've been a marketing consultant for probably 30 or 40 different online retailers and they're losing money constantly to fraudulent returns they're losing money to fees I mean the fees that are getting take out of every online transaction is just tremendous and the competition online is extraordinary I mean of course everyone wants to go and do business online if they can because they don't want to have those brick-and-mortar expenses so you've got you know countless competitors out there and and and a lot of them are much much bigger than you and when it comes to selling things retail it's all about volume you know you want to be able to buy as much as you can so you can get your cost basis down as much as possible so that you can make as much profit as you can for each transaction so that's why companies like Amazon they're selling like millions and millions and millions of little tiny things per day and they're able to make money because they have all that volume if you're starting out bootstrapping yourself it's very very difficult to break into that kind of business and that and Rudi didn't even go into the marketing costs you know if you if you if you don't want to have to pay those eBay fees and those Amazon fees you're gonna have to set up your own web shop and that means you're gonna have to spend a lot of money on marketing I mean there's their t-shirt businesses here in Vietnam that are run pretty much as bare-bones as can be I mean like minimal investment and they're they're having a drop I mean most of my clients were dropping 30 40 50 thousand dollars a month just on like Facebook and Google Ads to sell t-shirts so online retailing requires a lot of capitals well to have any hope for success right so here's what here's why this is a problem for an average worker who doesn't have tens and tens of thousands of dollars in the bank it's impossible to compete with with larger people unless you have that capital and having that kind of capital is literally like nothing for a very wealthy millionaire or billionaire if you have somebody who does have a trust fund who or who's you know just a billionaire from exploiting other people or even just a millionaire the risk that they're undertaking is exponentially like monumentally lower than what you as a bootstrapping person using your life savings is going to undertake so if you're going out you're risking $50,000 if you lose it you lose everything you're betting the farm that is a terrible idea as Rudy will now explain you'd get some people who are flipping investments in doing things and then they're so good at it what ends up happening is they get too cocky or confident and they keep adding more and more risk so they'll flip 1020 transactions or stocks and they make money and then on the 21st one they'll lose and that one loss on the twenty first transaction will undo all the gains they've had for the last you know five years because they keep leveraging upwards and betting the farm and that's always a term that always made me nervous like before I make an investment or thinking about life I always ask myself if this if this goes bad is it gonna take down the system does it have the ability to really you know direct the whole house of cards are you are you leveraged so high where if the reserve list went away what I literally have to go back to working at Taco Bell and get a real job at the good old you know Walmart or something now I'm just gonna fill in a little bit of a gap here because one thing Rudy doesn't talk about ever is starting a service business so something you know something like starting a digital marketing agency or a web development company or graphic design firm something like that and Rudy doesn't talk about that I don't know everybody has experience in those kinds of businesses or not I have a lot of experience that that's how I made the most money in my career was through services and I will tell you this right now it's exactly the same situation if you don't have the capital you cannot start a successful thriving service business you can become a freelancer and become highly heavily exploited because freelancers are some of the most exploited workers in the entire economy and I say this is a former freelancer as well freelancers get just like the worst deal most of the time because we don't get any of the protections or benefits of being an employee we get treated like garbage we're often working for free and doing free labor for people we don't get compensated for any of the you know generally speaking we don't get compensated for the planning or for the meetings and all that kind of stuff so yes you can start your little like like freelancing operation and you might be able to just squeak by and some people will thrive obviously but that's not the same thing as starting a business and if you want to start a service business then we're talking about human resources I love that capitalists evil expression human resources you must have these humans as your reasons to consume so anyway yeah if you're starting a service business that's all about people you know you're investing quote-unquote in people and what that means is you got to be paying people way less than you're taking in okay not just a cover for overheads it stuff like that but if you want to make like so if when I ran my video production company this is I'll just use a concrete example you know if I wanted to make five hundred bucks a day just to like pay the bills and keep the lights on and all that kind of stuff and keep my equipment in good condition all that kind of stuff you know I'd have to hire somebody and pay them like $10 an hour I'd have to charge $50 an hour to do that okay in order to do that you have to have all the nice equipment okay you can't go out and charge a client $50 per hour for a video shoot or $100 per hour sometimes we were charging like 500 ollars an hour depending what we were doing you can't charge that if you don't have the fancy cameras all the equipment the software everything legit you have to have like the real legit versions of the software so that you can work with because you have to work with other vendors a lot so if somebody's like oh well we got this other who shot you know this footage in New York they'll send you the footage if I have a crack version of premiere or final cut or whatever I'm not gonna be able to open that there's a very high chance I'm gonna be looking at footage so you have to have the real software you know when you're doing things as a business where you have all these different moving pieces and you're trying to charge the kinds of rates you need to charge to be able to practically exploit your employers that takes a lot of capital investment okay so yeah no matter how you slice it no matter what kind of business you're looking to start if you don't have liquidity if you don't have the capital if you don't have the ability to ride those rough waves and take advantage of those opportunities you're gonna struggle you're gonna fail and the numbers say it like Rudy said earlier in the video 70% of card shops fail not just card shops according to the numbers 70% of all businesses fail within around 10 years and if you're failing after 10 years that means you have been struggling and having a terrible time of it for that entire time it's just not a proposition that most people can undergo realistically it's it's worse than gambling I could go to Las Vegas and I could go to the craps table and I can bet on the pass line with odds and I have a 50/50 chance that I'm gonna win on that bet okay so they're literally your chances are better in Las Vegas at the craps table then they are for you to go out and try to bootstrap your own business with your life savings for most for the vast majority of workers on planet earth now you can increase your chances of success very substantially by having more capital and the more capital you're able to inject into your startup and the more liquidity you have and the more free capital like Rudy was talking about earlier the more liquid money you know liquid just means it's money that's not invested in like your computer it's not invested in a camera it's just cash that's in the bank ready to go ready to service your business if you don't have that kind of liquidity your chances for success plummet okay so becoming a capitalist under capitalism takes capital it's a very simple basic concept so let's return to the idea of risk and and the way that a lot of capitalists just glamorize risk and say that the reason that capitalists are entitled to making millions of dollars is because they've risk so much okay well we've already covered the fact that millionaires and billionaires are making much less of a risk in they make an investment then you are with your life savings okay that aside let's say you are a small business person you go out you you invest in this business you work hard and you win the lottery your business says really well and you start pulling in millions you have boots draft yourself up to success therefore according to the logic of capitalists you are entitled to all of that money that you wrenched from your employers and you're entitled to all of that exploitation that you are committing is this really the way that we want rot to run our society do we really want to run our society in a way where for you to have any chance of making it you have to gamble with odds that are worse than what you have in Las Vegas you have to put everything on the line with competition that can buy and sell you many times over in terms of the liquidity and the assets that they have I mean do you really think that this is how we should be pursuing human progress does this really sound like a good formula to you I'm just asking you just think about it okay if you're if you're Pro capitalist and this all sounds good to you you like the idea of risk reaping rewards through risk just think a little bit about it is this really honestly the best way that humans can can structure our society is there no better way are there is there nothing better we can do okay I'm just that's just an open question I'm just throwing that out there probably a topic for a future video but okay let's table that for now let's move back to that topic that Rudy brought up way back at the beginning of the video of how capitalism puts pressure on entities and employees to do bad stuff to cause harm if you're a big huge gigantic wealthy successful capitalist you've got this profit motive you've got these dollar signs in your eyes you want to make more and you don't want to lose on your investments so you're gonna do whatever it takes to get that profit that is the sole motivating factor for running a business in our society you can't have emotion in the game at all it's got to be cold calculating profit seeking behavior anything less than that you are going to fail someone is going to out-compete you somebody who's more ruthless and willing to do what you're not willing to do is gonna put you out of business so for big established capitalists it's the profit motive for small struggling small businesses that have that liquidity that they need that don't have the capital that they need that are terrified they're gonna lose everything they have the fear motivation to do things that are a little shady a little sketchy to do harm and let's just hear a little bit more about how capitalists in this capitalist worldview are supposed to make decisions on how to run their business and how to pull in those desperately needed profits you're making a business decision using a motion and you didn't leave a motion at the door and you're being an idiot and if you do not base your investments on pure logic I don't care if you agree with the company disagree is a business logical numerical thing when you make or lose money there is no motion it may have a side effect where you may feel a positive or negative response from a neurological brain telling you something but overall it is a cut and dry cold situation and you have to look at it as a strictly numerical investment digits it's flipping digits and colors and people don't do that so when you're looking at this kind of thing and you're building portfolios we have to strictly remove all emotion how much we want to own something how much we care about it and strictly look at it from a blunt raw number I guarantee you you would look at the investment very different it was just a bunch of numbers on a piece of paper versus a beautiful IRS's box that connects you to your childhood nostalgia and that is the most difficult thing for people to remember so funny enough Rudy also has a video on martin shkreli who is that you know dirt bag healthcare industry investor who is like jacking up the prices for desperately needed medications and Martin surely would tell you the exact same thing for us to try to exist and maintain a profit I think it's pretty reasonable I may not agree with the morals and ethics of individuals and what Martin may do in the pharmaceutical world because it's time to healthcare on the end of the day I understand what he's doing you have to make these decisions under capitalism and this cold calculating capitalistic manner if you don't you're not going to get your profit numbers where they need to be and you're going to go out of business or if you're a CEO you're gonna get swapped out for some other more ruthless CEO that is how capitalism functions there are there's no room for at in capitalism at all by design it is an amoral system the only thing that all of human industry is is hardest to is that profit motive for capitalists and at the end of the day any business whether they're making the video games that you want to play or whether they're making the medicine that you need to live the people at the top of those business are making decisions based solely on profit motive and you know capitalist can say all day long that what's best for the consumer is what's gonna drive profits but that's not true and and we've we've documented how many cases are there where the companies that you do business with every day are screwing you over and you have no choice but to just accept it accept the fact that you're being exploited accept the fact that you're not being dealt with fairly it's a power imbalance capitalism is an engine that produces power imbalances that's what capitalism is designed to do it's what it does best it puts a lot of people in a position of lower power and a few people in a position where they have a great deal of power that's how capitalism works and that's how our finance industry works now Rudy has a financial background knows a lot more about finance and credit cards all that stuff than I ever will but even Rudy recognizes how evil the finance industry is which is such a big part of our lives you know and like I said earlier the average American has six thousand dollars in credit card debt and less than a thousand dollars in the bank so here's how here's what Rudy has to say about the credit card industry and how that is just another way of sapping capital from the working class and putting it in the pockets of the wealthy powerful elite and we live in a society where if you use your credit card and you have a thousand dollar credit limit and you charge over five hundred dollars in a month they will actually lower your credit score because you broke 50% of your credit utilization number 50% because they operate on ratios and when you break through certain ratios they penalize you if you shop around and they people pull your credit they penalize you if you try to get multiple credit cards to have a lot of emergency situation you're penalized for thinking ahead if you try to use your credit card and then sick and every six months try to raise your limit you're penalized you're saying I'm getting it everything you do you are treated like shit that is the way the banking world works whoever designed how and why the system is designed to design and spit out a credit score number is the dumbest system I have ever seen because you're penalized for building credit building personal safety and building wealth you're penalized at least in the United States I don't know about you guys overseas not sure of your system in the u.s. you are treated poorly you are given a lower score for trying to better your future seriously why is it that if you're an individual citizen and you want to take out a loan for $1000 or you want to take a cash advance which you should never do or a credit card interest rate and if you have good credit your industry may be five to ten percent if you have bad credit maybe 10 to 20 percent so explain to me why when you're in the professional and no longer in the amateur category the more debt you take on the lower your interest rate is but when you're a normal citizen or an amateur non-professional label that any debt you take on is deemed evil and the rates are extremely high but the people over here the more leverage in debt they take on they start getting discounts or break points or lower did better deals and your prices go down if I borrow a thousand dollars I pay a 10% interest rate if I'm a professional and I want to leverage a million dollar line of credit or even if I want to go on margin on a brokerage account and I have 10 million dollars in assets and I want to go on margin for two million dollars what's funny is that take if I go on margin and borrow two million dollars from a brokerage firm my interest rates gonna be two to three percent maybe 2.9 maybe 1.9 depending on where you are because of the fact you're taking on so much debt they drop your rate to literally some form of prime plus a certain amount of basis points or even prime minus certain amount of basis points depending on your creditworthiness so then I don't understand why do we have a dumb standard why is it that a regular citizen whether you're American or anywhere in the world when you take on debt you're considered irresponsible and bad but if you're a large powerful wealthy individual or somebody building an empire when you take on debt and you're managing it and you're yo yeah I just took out five million dollars in debt what's your rate Rudy ah two point one one absolutely all right all right cheers to that let's go do something inappropriate and I know most of you guys say well Rudy it's pretty simple actually it's because the risk to the firm or the risk of somebody lending you the money it's obviously severely reduced so therefore they don't need to charge you as much of an interest rate because your default risk is so low your creditworthiness is so high I get that to an extent but it really does go in the face of everything we're told because people grow up and are wired a specific method and that method is that a very blanket statement debt is bad if you're in debt that's because you're an irresponsible bad human being and the thing is almost everyone I've met in real life who's been very successful in Wall Street and derivatives investing they're they're buying debts or different instruments or they're spying collectibles hell I know people who did cryptocurrency anybody anybody stamp collecting comic books vintage cards whatever you want almost every one of these people leveraged in you some form of injected capital or borrowed or some form of leverage of getting extra money and paying a low interest rate to slingshot them to a higher level in society you maybe bump themselves up one or two socio-economic classes they used leveraged and they borrowed and took on debt there you go so wealthy people are able to use debt in a way that creates more wealth whereas working-class people people who don't have a lot of wealth for us debt is this weight that we carry around with us throughout our lives it's this liability it's this it's this suffering that we endure that is the difference between being a working person and a capital society and being a wealthy capitalists for the wealthy capitalists all of these systems are designed to assist you all of these systems are designed to promote you to elevate you if you have the capital then you can make more capital it takes money to make money it's one of the oldest sayings around and there's so much truth in it versus if you're a working-class poor a person or or god forbid if you're in poverty all of these systems are designed to grind you down keep you down keep you from moving out the deck is stacked so heavily against you if you're a working-class or a poor person in a capitalist country like the United States of America it's unbelievable that people still buy into the system it's so so lopsided in terms of the power dynamics and and the biggest companies as Rudy I'll let put in this quick clip Rudy will talk about the way the biggest companies make money is through leveraging debt and through having you know tremendous amounts of capital at their disposal so that they can capitalize on whatever situation they're presented with it gives you so many more options if you have a lot of money I mean I know that goes without saying but that is a an important a critical component of capitalism is the fact that if you have a lot more money than you have so many more options in life and in business I don't know how these companies run their numbers but I think guarantee you gee words slept across my forehead that most of these large conglomerates operate on business lines of credit have different cash flows and they have forms of borrowing and leveraging during peak season then they gets paid off and gets new they can borrow a hundred thousand it gets paid off maybe they go up with ten thousand down there is gonna be a form of a buffer of liquidity some sort of something they can tap into if there's a major product coming out and they got to spend big or a major collection all of these companies and conglomerates use lines of credit and have a cost of capital now it is fullest you think you can move up in society without using capital in having any form of leverage I don't care if you're doing a leveraged buyout you're buying or selling a business I don't care if you're expanding your inventory unless your trust fund baby which unfortunately I wasn't I I was because that would be great to have tons of free money as everybody can probably agree and if you don't agree you're lying yourself unfortunately 99.9% of all of us including myself we were not born into it which was a crappy thing so we have to build our own empires we have to figure out our own way so Rudy knows it Rudy knows that capitalism is an engine that requires people to be at the bottom and that sucks and siphons wealth from that bottom class and it just shoves it up the ranks to the top Rudy knows it Rudy explains it very clearly and you know what as a former capitalist who spent a lot of time with other capitalists we all knew it we all know it we all know that once you make it into this capitalist class once you've once you beat those LasVegas those worse than Las Vegas odds you know and you make it to the top everything is going to be designed to support you and to keep you at the top and to siphon money from your workers from the workers of the world into your pockets that is what capitalism does and capitalists celebrate it there's a reason why money flows in a certain direction which is usually towards the top or towards the wealthy the rich get richer the poor get poor the divide of the class system gets me yeah I get I've heard it all and the thing is people don't care if you're either still watching this video this long I'm already surprised most people don't care because they don't know any different they don't feel like they're doing anything wrong and I think I genuinely believe from my history and passive actually having a real job is that most of this was designed intentionally so that you feel that way and we need a society like that we need a high proportion amount of human beings at a lower socioeconomic class I don't want you to turn bottom feeders because I don't think it's a very politically correct to turn on but we need people to churn the Machine we need people to every dollar they make that you have 10 cents on the dollar in the banks for fees transactions and paying interest and being in debt it's a nasty thing but it's how it is so that's it for this video uh if if Rudy ever happens to watch this I doubt that you will but if you do Rudy you know hey I can't really cast much aspersion on you I was you I was you not very long ago from from watching your videos I don't know if you're a good person or a bad person I don't know that it matters what I what I will say is I respect your honesty and I'm glad you tell it like it is because it's a great tool of analysis for us for the workers of the world who want to unite and build a better world it's great that there are honest capitals like you who are willing to just lay all the cards on the table that was imagine the gathering joke and and tell it like it is I'm glad that you're so honest and I'm glad that there are people like you out there who are willing to soberly and with no emotion just explain how these things work from the perspective of the capitalist class because that is a great learning tool for those of us who are in the lower ranks of society and who want to make a better world so thank you for your honesty if nothing else and thank you whoever you are for watching I would love to collect and review more videos like this so if you have other examples of capitalists who are just like completely honest about how evil the system of capitalism is please share them in the comments below be sure to LIKE and subscribe and that's all I got I'm American Johnson this is non-compete we'll see you next time at the classroom lectern is dr. Clifton L gayness jr. noted young historian in order to have a proper appreciation of the America economic system we must know how the national income is divided in America in other words we must examine the distribution of the great wealth produced through the operation of American capitalism is the distribution widespread or is the wealth of America concentrated in the hands of a few as a socialist and communist say we know that American capitalism is morally right because it's cheap elements private ownership the profit motive and the competitive market are wholesome and good




Comments
  1. Footnote: Rudy JUST released this video about how small sellers can't make it on eBay:

    https://youtu.be/MQd_f6YbQ7k

  2. Very interesting take. Subbed. Tbh I'm always amazed by how "gamers", even those leaning towards the alt-right, actually conceptualize the systemic prolems of capitalism pretty adequately, as they witness corporate layoffs, the rise of microtransactions, games rushed for profit. The spark is here, and I always thought to myself : " Wait, these guys are pretty ripe for a fundamental critical theory of capitalism. This is almost class conciousness right here…" But then I'm always sent back to their unfathomable cognitive dissonance, their allegiance to libertarian think tanks and their hatred of "lefties" or "cultural marxist"…

  3. So I don’t understand completely why those who completely reject capitalism still participate in it. I mean I get it, living is pretty great. I guess my biggest gripe is when socialist commentators (not necessarily this guy) still buy consumerist products. I’d like to hear all of your thoughts.

    I should mention this isn’t like an attempt to “own the libtards” or anything I just was some constructive conversation.

  4. A problem I saw in a run of "ethical businesses" even if they had a popular product, their competitors had much greater ability to access capital. The second problem is retailers prefer to sell a $2 item at $7 than a $5 one at $10.

  5. Louis Rossman is sometimes very frank about the nature of exploitation, and about the divide between capital-C Capitalists and the petit-bourgeoisie (although his consciousness seems recently to be shifting in favor of Capitalists on that front)

    see, for example, https://www.youtube.com/watch?v=9Wu2r9wjsks

  6. Really good job outlining the way capitalism also binds and constraints capitalists, that their choices to be compassionate, fair, consumer-oriented, whatever, are very limited

    An accessible articulation of what Marx called ‘the coercive laws of capital’ in the most widely consumed medium (video/audio recordings) and vernacular of our time

  7. Wow never heard of this Rudy guy before and I can't imagine functioning with his dark cynical mindset and not being deeply, deeply unhappy

  8. I don't understand why this guy is still a capitalist when he clearly finds the whole system disgusting

  9. It makes me really wonder how dude can continue to be a capitalist with his understanding of it.

  10. Rudy says he's apolitical, but that thing at the end, where he says we nééd a lower class for 'the system' to function, is a core conservative political belief.

  11. Sociopaths seem to have the competitive advantage over individuals with empathy for others and moral values in a capitalist system.

  12. Rudy is great guy. This is a fair response. Rudy is just playing the game of capitalism. Because y'know, not much of choice. We all gotta play.

  13. Oh damn Rudy is kind of like a guilty pleasure of mine 😉 Honestly surprised this crossover is happening

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